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Saturday, September 10, 2011

50% Chance of Recession

Ian Wyatt

It's unfortunate that we've had to wait until a year before the next presidential election to get the American Jobs Act. There's no reason, except for politics, why we couldn't have gotten this $450 billion a year ago. But now that an actual jobs bill is here, it will be interesting to see how it's treated in Congress. On the subject of spending and debt, a Daily Profit reader asked: How can you advocate sound fiscal policy and fiscal stimulus at the same time? We are borrowing over a trillion dollars a year, just to keep the economy on life support. Do the math. If the government increases spending and cuts taxes the difference has to be made up by borrowing, i.e. more debt.....

China's inflation rate has only moderated for one month, so it's a little early to say the soft-landing is happening. I will also point out that China could allow its currency to appreciate to combat inflation. Of course, China is too afraid that this would choke its export economy, but it will have to happen eventually... Economist Paul Krugman says there is a 50% chance the global economy will enter recession. Not coincidentally, he also says that there is zero chance the president's jobs bill will pass Congress. Krugman is just the latest to point out the obvious, that austerity equals recession.

Hey, look, the USPS is bankrupt. Hey, look Social Security is bankrupt. Hey, look, medicare is bankrupt. Hey, look, they are going to vote another half a trillion for government to spend. Maybe Solyndra needs another billion or so, since it went bankrupt after the 100 million it got in the last Obama stimulus bill.

We need another stimulus bill so Democrats can give taxpayers money to big Obama supporters, so Obama can win again and finish his job of destroying the country.

Like the previous trillions we've spent to "stimulate" the economy, another $450B will only be used to pay off whoever the administration wants to. Keynesian economics is a fraud, as Keynes himself acknowledged when he said, "In the long run, we're all dead."

The real problems we have in the US are out-of-control spending and regulation, an indecipherable tax code, crony capitalism bolstered by that tax code, dwindling demographics, and a ruling class who is more concerned with keeping the electorate happy and stupid as they hold out things like this "jobs bill" as the next great hope.